Union Bankshares, Inc. Reports Strong Q1 2026 Results and Dividend Declaration

Key Highlights

• Q1 2026 Net Income Surges: Net income for the three months ended March 31, 2026 reached \$3.0 million, or \$0.65 per share, up from \$2.5 million, or \$0.55 per share, in Q1 2025—a robust increase of 20% in earnings per share.
• Dividend Declared: The Board of Directors has declared a regular quarterly cash dividend of \$0.36 per share, payable on May 7, 2026 to shareholders of record as of April 27, 2026.
• Continued Asset Growth: Total assets rose to \$1.63 billion, reflecting a 6.6% increase year-over-year, driven by higher federal funds sold and a materially expanded investment securities portfolio.
• Book Value Per Share Jumps: Book value per share increased by 13.1% year-over-year, to \$17.46 as of March 31, 2026.
• Improved Credit Quality: Allowance for credit losses on loans decreased slightly, asset quality remains strong, and a credit loss benefit was recorded for the quarter.
• Deposit Trends and Funding: Total deposits declined to \$1.20 billion from \$1.81 billion, with brokered deposits stable. Borrowed funds increased significantly to \$311 million.

Detailed Financial and Operational Review

Balance Sheet Developments

Union Bankshares, Inc. continues to demonstrate notable balance sheet growth. As of March 31, 2026, total assets stood at \$1.63 billion, up from \$1.52 billion a year prior. The asset increase was primarily driven by a \$16 million boost in federal funds sold and overnight deposits and a strategic expansion of the investment securities portfolio by \$66 million, or 26.4%. The bank pre-invested future cash flows into the securities portfolio during Q4 2025, signaling a proactive approach to liquidity and yield optimization.

Total loans grew modestly, up \$15.8 million (1.3%) to \$1.18 billion. Sales of qualifying mortgage loans remained robust at \$24.1 million for the quarter, though slightly lower than the prior year (\$25.8 million).

The allowance for credit losses on loans was \$8.07 million, down 0.5% from a year ago, reflecting management’s view of a stable and high-quality loan portfolio. This is further supported by the strong asset quality and ongoing monitoring of macroeconomic factors.

Notably, total deposits declined considerably to \$1.20 billion from \$1.81 billion, a significant figure for investors to monitor, though brokered deposits were stable (\$31.8 million vs \$30.5 million). To support the balance sheet, borrowed funds (mainly FHLB advances) increased to \$311 million, up from \$240.7 million. Stockholders’ equity saw a substantial increase of \$10.5 million to \$80.6 million, alongside an improved accumulated other comprehensive loss on investment securities, which decreased to \$27.7 million from \$31.4 million.

The jump in book value per share (13.1% increase to \$17.46) is particularly noteworthy for shareholders.

Income Statement Performance

Union Bankshares delivered a 20% increase in earnings per share, driven by a combination of:

• Net Interest Income: Up \$1 million (10%) to \$11.3 million, thanks to a larger earning asset base and higher interest rates.
• Interest Income: Rose \$1.2 million (6.8%) year-over-year to \$19.5 million.
• Interest Expense: Increased \$210 thousand (2.6%) to \$8.2 million, mainly due to higher volumes of deposits and borrowings.
• Credit Loss Benefit: The company recorded a \$325 thousand benefit versus a \$235 thousand expense last year, reflecting improvements in credit quality and the loan portfolio mix.
• Noninterest Income: Grew by \$54 thousand to \$2.5 million, with net gains from mortgage sales at \$350 thousand versus \$389 thousand a year ago.
• Noninterest Expenses: Rose \$958 thousand (9.8%) to \$10.8 million, primarily from higher salaries, benefits, equipment, and other operating costs.
• Income Tax Expense: Jumped to \$328 thousand, up \$178 thousand year-over-year.

Dividend Announcement

The declared quarterly cash dividend of \$0.36 per share, payable May 7, 2026, underscores management’s confidence in the company’s earnings power and capital strength. This continued payout provides shareholders with reliable income and may support valuation.

Company Profile and Community Focus

Headquartered in Morrisville, Vermont, Union Bankshares, Inc. is the parent holding company of Union Bank, which offers commercial, retail, municipal banking, and wealth management services across northern Vermont and New Hampshire. The bank operates 18 offices and 3 loan centers, with a strong community orientation. Union Bank is recognized for its excellence in residential mortgage lending, and is an SBA Preferred Lender and a top originator for the Vermont Housing Finance Agency. The bank’s ongoing “Outstanding” CRA rating highlights its commitment to local communities.

Key Takeaways for Shareholders and Investors

• Strong Earnings Growth: The company posted solid earnings growth, driven by higher interest income, prudent securities investment, and improved credit quality.
• Book Value Accretion: Book value per share increased significantly, supporting the investment case for long-term holders.
• Deposit Outflows: The substantial decrease in total deposits merits close attention, as it could impact future funding costs and liquidity, despite higher borrowings covering the gap.
• Dividend Stability: The continued dividend payout provides yield support and signals financial stability.
• Credit Quality: Recording a credit loss benefit is a positive sign and reduces risk, but the loan portfolio and macroeconomic environment should be closely monitored going forward.
• Strategic Positioning: The increase in the securities portfolio during Q4 2025 and ongoing balance sheet management may enhance earnings resilience amid changing market conditions.

Potential Market Impact

The strong quarterly results, significant growth in book value per share, and consistent dividend policy are all likely to be viewed positively by investors and may support upward movement in the company’s share price. However, the notable decline in total deposits, offset by increased borrowings, is a key risk factor that markets will be watching. Management’s forward-looking statements and continued focus on asset quality, community engagement, and prudent capital management should provide reassurance to shareholders.

Forward-Looking Statements

The company notes that forward-looking statements involve known and unknown risks, uncertainties, and other important factors that could cause actual results to differ materially from those expressed or implied. These include changes in economic conditions, interest rates, regulatory changes, competition, and other risks.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult a financial advisor before making investment decisions. Past performance is not indicative of future results. All forward-looking statements are subject to risks and uncertainties.

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